• Journal of Korean Society of Transportation
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• v.26 no.1
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• pp.65-78
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• 2008

After the railway reform in 2004, Korea National Railroad was divided into two separate organizations. The Korea Railway Network Authority is responsible for the construction of new line. Korea Railroad corporation is a public-owned railway operator. The compensation for the loss of rail operator from the Public Service Obligation(PSO) observance is specified in the Law of Rail Industry Development No.32, No.33. However, it is necessary to revise the compensation criteria of PSO after the actual enforcement of the law for more efficient rail operation. This study aims for revising compensation criteria of PSO. In this study, we suggested a revised compensation criteria. The scope of compensation for the loss of regional line operation was adjusted by new criteria considering the characteristics and the business results of the line. The compensation rate is linked with the actual business results of the line for giving motivation to the rail operator.